House loan: No more preferential rates

At the beginning of last year, banks offered a 30 percent discount on interest rates for first time home buyers. Since beginning of this year however, many banks have only been giving a 20 percent discount.

On April the 1st, Agricultural Bank of China changed the discount rates for first time home buyers to 20 percent from 30 percent. Now, all major banks have followed suit.

Agricultural Bank of China: "We do not offer 70 percent house loan interest rate any more."

ICBC: "We changed our policy since March 29. Now our lowest rate is 75 percent."

Real estate agents say the adjustments have affected their sales.

Wei Jianqiang, house agent, said, "Our house sales have dropped obviously after the bank policy changed."

The banks' policy is aimed to curb speculation while the government is trying to cool down the real estate market.

Wei said, "The banks' moves are targeted at speculators. It is also aimed to reduce risks on house loans. The move will dampen purchases of those who have less money."

Some insiders worry that as house prices are rising, those who really need to buy houses to live in are taking a wait-and-see attitude.